Diamonds and Dogs

8/3/17

Tesla (TSLA) is the diamond, but not all the news is bullish. Tesla is jumping 7% following better than expected earnings and sales guidance. Quarterly revenue doubled as the company is receiving more than 1,800 daily reservations for the newly launched Model 3s. The downside is Tesla is burning through over $2 billion in cash so far this year ahead of the launch, and expects to spend another $2 billion in the second half.  Tesla is not considering an equity raise, but may consider a debt raise. They see significant capital needs ($3 billion to $6 billion) to deliver Model Y by late 2019.

Teva Pharma (TEVA) is getting hit down 21% to a 10 year low after missing earnings estimates and lowering guidance whilw cutting their dividend 75%. Revenues did rise 12.9% year/year to $5.69 billion.The company is experiencing accelerated price erosion and decreased volume with their drugs mainly due to customer consolidation and greater competition due to increase generic drug approvals by the U.S. FDA, and some new product launches that were either delayed or subjected to more competition.